Afghanistan moves to entice foreign investors

New incentive package to include low land costs, tax exempt status, and multiple entry visas for investors.

    Finance Minister Omar Zakhilwal said construction, agriculture and mining were key industries [EPA]
    Finance Minister Omar Zakhilwal said construction, agriculture and mining were key industries [EPA]

    Afghanistan's government has revealed new incentives to attract investors to the war-torn country before North Atlantic Treaty Organisation (NATO) withdraws next year.

    The goal of this policy is to support investment in different sectors, especially in industry, construction, agriculture and mining

    Azrat Omar Zakhilwal, Finance Minister

    The new policies, which will remain in place for two and a half years, are designed to ease fears that billions of dollars in aid money could dry up and to encourage investors, both foreign and Afghan, to sink money into the economy.

    According to the International Monetary Fund (IMF), direct foreign investment in Afghanistan totalled more than $83m, about 0.43 percent of the country's gross domestic product (GDP).

    This was down significantly from 2010 when more than $211m came into the country from foreign investors.

    "The goal of this policy is to support investment in different sectors, especially in industry, construction, agriculture and mining," Finance Minister Azrat Omar Zakhilwal told reporters.

    "It is also aimed at attracting local and international investments, and to prevent investments from leaving the country," he said.

    The incentives include providing land at almost no cost to industrialists, seven-year tax exemptions for factory owners and 10-year, low-interest loans for farmers, as well as one-year multiple entry visas.

    Security concerns

    This package comes after a new mining law, devised in May this year and designed to make it easier for foreigners to invest, passed into the lower house of the Afghan parliament.

    In June this year a delegation of officials from US, Britain, and several Asian countries visited mines in Mazar-e-Sharif to asses business opportunities to explore after the law was passed.

    Economic development is considered a vital weapon to stop the country from sinking back into civil war after 100,000 troops pull out next year.

    There are fears that once NATO troops withdraw, aid money will decline and investors will leave due to security concerns.

    Wealthy Afghans have already moved significant investments to the Gulf or the West.

    "This year and over the coming years, millions of dollars hopefully will be invested and will have direct impact on our economy," the finance minister said.

    SOURCE: Al Jazeera and agencies


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